The Chairman of Dangote Group, Aliko Dangote has revealed that the crisis surrounding the supply of local crude oil to his $19bn dollar refinery has been resolved.
However, Dangote’s confirmation of the resolution of the crude crisis might be a soothing balm to Nigerians who feared the lack of feedstock might jerk up the price of the refinery’s PMS.
The PUNCH’s correspondent reports that this will be about the third time the refinery will postpone its PMS delivery date since it commenced the supply of diesel and aviation fuel into the Nigerian market.
According to Dangote, the refinery commenced full operations in 2024. starting with refining intermediate products such as polypropylene, naphtha, RCO, gasoline, diesel, and jet fuel.
He noted that the refinery steady state production phase commenced in March 2024 while also expecting the ramping up production to reach 500,000 barrels per day with 15 crude cargoes a month by next August, 550,000bpd by the end of the year, and 650,000bpd by the first quarter of 2025.
According to a presentation by Dangote during the tour, the refinery project is said to be fully online, with over $26bn being expected annually.
“Successful completion of trial run in January 2024. Refined and intermediate products include polypropylene, naphtha, RCO, gasoline, diesel, and jet fuel. Steady state production phase commenced in March 2024.
“Ramping up production to reach 500kbpd (15 crude cargoes a month) by next August, 550kbpd by the end of the year, and 650kbpd by the first quarter of 2025. Gasoline production is to commence in July with sales from August. Annual revenue is projected to exceed $26bn,” Dangote stated.
He added that the refinery had dedicated loading gantries with 86 loading bays; dedicated marine facilities for offtake of crude and loading of petroleum products; 900-kilo tonnes per annum polypropylene plant, 36ktpa sulphur, and 585ktpa carbon black production.
The total storage capacity of the refinery is put at 4.5 billion litres, which can cover 20 days of crude requirement product storage for 15 days of Nigeria’s petrol consumption.
He averred that the refinery would produce 53 million litres of petrol per day and 1.1 million tonnes per day.
“The Dangote Refinery can meet Nigeria’s requirements and have a surplus for exports,” he boasted.
On oil and gas, he added further, “We have built over 200km of gas pipelines in partnership with NGIC on a BOT basis. We also have other projects in the pipeline including a 3 billion cubic feet East-West Gas Gathering System offshore pipeline (design and engineering completed, awaiting commercial framework); 600 million standard cubic feet onshore gas pipeline(construction stage); and 300mscf gas processing facility (design stage).
These projects, he said, would help deliver gas for further investment and also help stabilise gas pressure in the Escravos–Lagos Pipeline System
The PUNCH recalls that during the Africa CEO Summit in Rwanda, Dangote promised that the refinery would put an end to the monthly importation of an average of 1 billion litres of premium motor spirit in Nigeria the moment the refinery started selling the product in June.
According to him, following the laid-down plans of the Dangote refinery, Nigeria will no longer need to import petrol starting in June.
Dangote also stated that his refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.
He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre,” he declared.
He added, “We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.
“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do is that, it will be able to take most African crudes.”
In June, Dangote informed Nigerians his plan to release premium motor spirit into the market in the sixth month of the year would no longer be possible, sparking reactions from Nigerians.
The President of Dangote Group, Aliko Dangote told newsmen during a tour of the facility with Governor Babajide Sanwo-olu of Lagos State and other dignitaries that the petrol from the 650,000 barrels capacity refinery would be out in July.
Dangote said this was due to some minor challenges, stating that the product would be out by July 10 to 15.
“We had a bit of delay, but PMS will start coming out by 10 to 15 of July. But then we want to keep it in the tank to make sure that it settles. So by the third week of July, we’ll be able to come out to take it into the market,” Dangote had said.
Contrary to popular belief, Dangote announced that the NNPC has a 7.2 per cent stake and not 20 per cent as being speculated.
He stated that while the NNPC had promised to provide the funds, it had been unable to meet its obligations, thus reducing its stake in the $19bn refinery to 7.2 per cent.
He said, “The NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were meant to pay their balance in June but have yet to fulfil the obligations. Now, they only own a 7.2 per cent stake in the refinery.”
In a statement on Sunday, the NNPC confirmed that it decided not to add to its earlier investment in the refinery.
According to the NNPC Chief Corporate Communications Officer, Olufemi Soneye, the energy company had several months ago decided to cap its investment at the amount already paid. Soneye hinted that the decision not to invest any further in the Dangote refinery did not impact NNPC’s business.
“Several months ago, we made a commercial decision to cap our investment at the amount already paid. This decision was taken by NNPC Ltd and has no impact on our business,” he said tersely.
